Opting out

April 19, 2006

If you're hoping to get a break on the 72 percent electricity rate increase that was to go into effect this summer for Baltimore Gas and Electric customers, then you may have to be on your toes. That's because, according to recent reports, Gov. Robert L. Ehrlich Jr. and executives from BGE's parent, Constellation Energy Group, have been talking about limiting the first year's increase to 15 percent - but making that available on an opt-in basis.

This is a lousy idea. Such opt-in programs are commonly employed by companies and industries that are forced to offer something to consumers - such as a do-not-call list - that they really don't want to offer. Corporations like such devices because lots of folks tend to neglect to opt in, and so little changes.

If BGE ends up requiring customers to opt in to limit their initial electricity rate increase to 15 percent, the poor, less-educated and elderly can be expected to disproportionately fail to take advantage of the savings. They would end up paying more - presumably, a 21 percent electric rate increase with the deferred amount borrowed from the utility at 5 percent annual interest, the original deal struck by the state Public Service Commission with Constellation.

Those who fail to opt in also would end up saving Constellation money by lowering the amount it would have to borrow to hold increases to 15 percent. And to an extent, they would be subsidizing those savvy enough to learn how to opt in and go through the required steps in time.

That an opt-in requirement has even been on the table makes one wonder whether the governor has been giving enough thought to the plight of the utility's customers. Mr. Ehrlich was slow off the mark when the rate-increase issue took off, and he was content to serve as a neutral arbiter while the legislature played hardball.

The governor ended up vetoing the General Assembly's effort to extort rate relief through legislation that would have interfered with Constellation's planned merger with Florida's FPL Group. We can't blame him for that; as useful a bargaining tool as it was, if carried through, such a move would have been poor public policy. And then the legislature - thanks to Senate President Thomas V. Mike Miller - let a pretty good deal from Constellation slip away for reasons that still aren't entirely apparent.

But the state continues to have a legitimate interest in the operation of public utilities here - and now the ball is solely in Mr. Ehrlich's court. Utility re-regulation - as proposed Monday by Montgomery County Executive and Democratic gubernatorial candidate Douglas M. Duncan - is simply not practical. Going back to the legislature to recapture the lost deal seems more fruitless with each passing day.

So it is, for better or worse, the governor's task to cut a deal with real benefits for Marylanders. Constellation in this last legislative session put a lot of money on the table. Let's see how much of it Mr. Ehrlich can keep there.